Current Long Positions (stop-losses in parentheses): TICC (8.64)

Current Short Positions (stop-losses in parentheses): SPY (113.30), DELL (13.26), FL (13.81)

BIAS: 34% Short

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Retail Sales (8:30am), Redbook (8:55am), Business Inventories (10am)

My Observations and What to Expect:

  • Futures are slightly down.
  • Bulls managed to push beyond the 200-day moving average. Now the last barrier between the bulls and the April highs is the infamous 1130 level. Should be as hard to push through as 1040 was for the bears. 
  • S&P is up 8 out of the past 9 trading sessions – to say the least the market is overbought. 
  • I expect the bulls to get fairly nervous about holding their long positions in the days ahead. 
  • There is a lot of room – at least 30 points worth for the bears to push this market lower before hitting any significant support out side of the 200-day moving average. 
  • The inverse head and shoulders pattern on the daily and weekly charts on the S&P are nearing completion – 1130 will mark completion. 

Actions I Will Be Taking:

  • I will add an additional short position if the market chooses to reverse course. Until then I am not going to commit any additional capital. 
  • Gap-down this morning is setting up for a nice fading opportunity. 
  • If the market pushes through 1130 today, I will close out all of my short positions. 
  • Won’t go long though until there is some kind of pullback in the broader markets. 

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